BoE: Inflation could remain above target for two years

The Bank of England said today it expects the UK economy will see a "slow, but sustained recovery" but warned that inflation will rise to 3% or more and remain above target for another two years.

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Household squeeze 'to worsen'

The Bank of England governor made clear today that the squeeze on household budgets will only get worse. Sir Mervyn King said he expected inflation to rise to three percent or more by the Ssummer and stay above target for another two years.